The population of most developed societies is ‘graying’. As life expectancy increases and thelarge baby-boom generation approaches retirement age, this has critical consequences formaintaining a high standard of living and the sustainability of pension systems. In the light ofthese labor-force...

We test a mechanism whereby groups are formed voluntarily, through the use of voting. These groups play a public-goods game, where efficiency increases with group size (up to a limit, in one treatment). It is feasible to exclude group members, to exit one's group, or to form larger groups...

The notions of one's social identity and group membership have recently become topics for economic theory and experiments, and recent research has shown the importance of identity in a wide array of economic environments. But predictions are unclear when there is some trade-off between one's...

We devise an experiment to explore the effect of different degrees of competition on optimal contracts in a hidden-information context. In our benchmark case, each principal is matched with one agent of unknown type. In our second treatment, a principal can select one of three agents, while in a...

Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary choices that test these theories more directly than the array of games conventionally considered. Our...

In experiments with two-person sequential games we analyze whether responses to favorable and unfavorable actions depend on the elicitation procedure. In our “hot” treatment the second player responds to the first player’s observed action while in our “cold” treatment we follow the...

This paper explores the effect of the possibility of third-party intervention on behavior in a variant of the Berg, Dickhaut, and McCabe (1995) “Investment Game”. A third-party’s material payoff is not affected by the decisions made by the other participants, but this person may choose to...

It has long been standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. However, this assumption is clearly refuted by numerous experiments, and we feel that it may be useful to consider nonpecuniary...

Many authors have discussed a decline in internal labor markets and an apparent shift to a new employment contract, characterized by less commitment between employer and employee and more portable skills. These discussions occur without much evidence on what employment contract employees...

The effectiveness of pre-play communication in achieving efficient outcomes has long been a subject of controversy. In some environments, cheap talk may help to achieve coordination. However, Aumann conjectures that, in a variant of the Stag Hunt game, a signal for efficient play is not...